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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-27 · 69 added, 79 removed, 299 unchanged (33% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Annual Report on Form 10-K contains forward-looking statements within the meanings of the federal securities laws.

This Annual Report contains forward-looking statements within the meanings of the federal securities laws.

These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those expressed or implied by such forward-looking statements.

For a detailed discussion of these risks and uncertainties, see the “Risk Factors” section in Item 1A of Part I of this Form 10-K.

We caution the reader not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Form 10-K.

We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-K.

For a detailed discussion of these risks and uncertainties, see the “Risk Factors” section in Item 1A of Part I of this Annual Report.

We caution the reader not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Annual Report.

We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report.

We are a biopharmaceutical company that develops and commercializes innovative products to enhance cancer care and improve treatment outcomes for patients.

We are currently commercializing NERLYNX, an oral version of neratinib, for the treatment of certain HER2-positive breast cancers.

Additionally, in 2022, we in-licensed and became responsible for the global development and commercialization of alisertib.

Additionally, we have in-licensed, and are responsible for global development and commercialization of, alisertib.

Alisertib is a selective, small-molecule inhibitor of Aurora Kinase A that is designed to disrupt mitosis leading to apoptosis of rapidly proliferating tumor cells that are dependent on Aurora Kinase A.

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We currently market NERLYNX in the United States using our direct specialty sales force consisting of approximately 35 sales specialists.

Our sales specialists are supported by an experienced sales leadership team consisting of several regional business leaders and a VP of sales, as well as experienced professionals in marketing, managed markets, access and reimbursement, research, and sales planning and operations.

Our sales specialists are supported by an experienced sales leadership team consisting of five regional business leaders a Senior Vice President of Sales and a Senior Vice President of Marketing, as well as experienced professionals in marketing, managed markets, access and reimbursement, research, and sales planning and operations.

Outside the United States, we seek to enter into exclusive sub-license agreements with third parties to pursue regulatory approval, if necessary, and commercialize NERLYNX, if approved.

As of December 31 2024, NERLYNX has received approval for the treatment of certain patients with extended adjuvant and/or metastatic HER2-positive breast cancer in over 40 countries outside the United States.

We are currently party to several sub-licenses in various regions outside the United States, including Europe (excluding Russia and Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, and various countries and territories in Central America, South America, Africa and the Middle East.

As of December 31, 2025, NERLYNX has received approval for the treatment of certain patients with extended adjuvant or metastatic HER2-positive breast cancer in over 40 countries outside the United States.

We are currently party to several sub-licenses in various regions outside the United States, including Europe (excluding Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, Russia and various countries and territories in Central America, South America, Africa and the Middle East.

In September 2022, we entered into an exclusive license agreement with Takeda to license the worldwide research and development and commercial rights to alisertib.

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In clinical trials to date, alisertib has shown single agent activity and activity in combination with other cancer drugs in the treatment of many different types of cancers, including hormone receptor-positive breast cancer, triple negative breast cancer, small cell lung cancer and head and neck cancer.

We initiated the ALISertib in CAncer (ALISCA™ -Lung1) Phase II trial (PUMA-ALI-4201) of alisertib monotherapy for the treatment of patients with extensive stage small cell lung cancer in February 2024, and we commenced the ALISCA™ -Breast1 Phase II trial (PUMA-ALI-1201) in the fourth quarter of 2024.

Under the terms of the exclusive license agreement, we assumed sole responsibility for the global development and commercialization of alisertib.

We paid Takeda an upfront license fee of $7.0 million in October 2022 , and it is eligible to receive potential future milestone payments of up to $287.3 million upon our achievement of certain regulatory and commercial milestones over the course of the exclusive license agreement, as well as tiered royalty payments for any net sales of alisertib.

We recorded in-process research and development expense of $7.0 million during the year ended December 31, 2022, in connection with the up-front payment related to the asset acquisition.

We recorded in-process research and development expense of $7.0 million during the year ended December 31, 2022, in connection with the upfront payment related to the asset acquisition.

As of December 31, 2025, no milestones had been accrued as the underlying contingencies were not probable or estimable.

Our expenses to date have been related to hiring staff, commencing company-sponsored clinical trials and the build out of our corporate infrastructure and, since 2017, the commercial launch of NERLYNX.

Our expenses to date have been related to hiring staff, commencing company-sponsored clinical trials, building out of our corporate infrastructure and, since 2017, the commercial launch of NERLYNX.

Going forward, we anticipate significant expenses as we continue to develop alisertib in 2026.

Accordingly, our success depends not only on the safety and efficacy of our drug candidates, but also on our ability to finance product development.

To date, our major sources of working capital have been proceeds from produc t and license revenue, public offerings of our common stock, proceeds from our credit facility and sales of our common stock in private placements.

To date, our major sources of working capital have been proceeds from product and license revenue, public offerings of our common stock, proceeds from our credit facility and sales of our common stock in private placements.

We intend to satisfy our near-term liquidity requirements through a combination of our existing cash and cash equivalents and marketable securities as of December 31, 2025, and proceeds that will become available to us through product sales, royalties and sub-license milestone payments.

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Some of these developments have had and may continue to have an adverse effect on our revenue and thus could have an adverse effect on our ability to satisfy the minimum revenue and cash balance covenants contained in the Athyrium Notes.

We do not believe that tariffs imposed or proposed to be imposed by the United States, particularly with the EU and China, will have a material impact on our product costs or results of operations.

However, shifts in trade policies in the United States and other countries have been rapidly evolving and are difficult to predict.

The ultimate impact of any announced or future tariffs will depend on various factors, including what tariffs are ultimately implemented, the timing of implementation and the amount, scope and nature of such tariffs and potential exclusions from the application of those tariffs.

On July 4, 2025, the “One Big Beautiful Bill” was signed into law, which includes significant changes to federal tax law and other regulatory provisions that may impact us.

As of the date of these financial statements, we have evaluated the impact of the changes to Section 174 – Amortization of Research and Experimental Expenditures on the valuation allowance release.

We intend to deduct the capitalized costs over two years.

This deduction reduces the amount of net operating losses being utilized but results in a net zero change to th e deferred tax asset balance.

In 2 025, we adjusted a portion of our valuation allowance related to our deferred tax assets in the amoun t of $3.8 million, w hich reduced our net income for the year.

Summary of Income and Expenses

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Internal R&D expenses primarily consist of payroll-related costs and also include equipment costs, travel expenses and supplies.

We expect R&D expenses to increase in 2025 as we conduct two Phase II clinical trials of alisertib.

Acquired In-Process Research and Development Expense

Acquired in-process research and development expense includes the rights to develop new drug candidates.

Payments to acquire a new drug candidate are immediately expensed as acquired in-process research and development provided that the drug candidate has not achieved regulatory approval for marketing and, absent obtaining such approval, has no alternative future use.

We expect R&D expenses to increase in 2026 as we expand the development of alisertib.

Reclassifications

Certain prior year amounts in the Consolidated Statements of Cash Flows have been reclassified to correct an error in the prior year's presentation.

Specifically, for the year ended December 31, 2024, a change in deferred tax assets of $7.1 million was previously classified within "Changes in operating assets and liabilities." This amount has been reclassified to non-cash items within the operating activities section of the Consolidated Statements of Cash Flows.

This reclassification had no impact on the total net cash provided by (used in) operating activities, net income, or the Consolidated Balance Sheets for any period presented.

Results of Operations

The following summarizes our results of operations for the years ended December 31, 2025 and 2024.

For discussion related to the results of operations and changes in financial condition for the year ended December 31, 2023, compared to the year ended December 31, 2022, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report for the Year Ended December 31, 2023, which was filed with the United States Securities and Exchange Commission on February 29, 2024.

For discussion related to the results of operations and changes in financial condition for the year ended December 31, 2024, compared to the year ended December 31, 2023, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 27, 2025.

Total revenue

Total revenue was approximately $228.4 million for the year ended December 31, 2025, compared to $230.5 million for the year ended December 31, 2024.

This decrease in total revenue of $5.2 million was due to a decrease in product revenue, net of approximately $7.9 million, partially offset by an increase in royalty revenue of $2.8 million.

This decrease in total revenue of $2.1 million was due to a decrease in royalty revenue of $11.0 million, partially offset by an increase in product revenue, net of approximately $8.9 million.

Product revenue, net

Product revenue, net was approximately $204.1 million for the year ended December 31, 2025 , compared to $195.2 million for the year ended December 31, 2024 .

The decrease in product revenue, net was primarily attributable to a volume decrease of approximately 8.7% in bottles of NERLYNX sold, partially offset by an increase in net selling price.

The increase in product revenue, net was primarily attributable to a volume increase of approximately 5.5% in bottles of NERLYNX sold and an increase in net selling price.

Reserves for variable consideration were approximately 24.3% and 19.5% of product revenue for the years ended December 31, 2025 and 2024, respectively.

The increase in the variable consideration (gross-to-net reserve) was due to prior year adjustments related to lower Medicaid claims.

The increase in the variable consideration (gross-to-net reserve) was primarily due to government chargebacks and payor mix.

License revenue

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Royalty revenue was approximately $24.3 million for the year ended December 31, 2025 , compared to $35.3 million for the year ended December 31, 2024 .

The increase was due to increased product sales by our sub-licensees as they increased commercialization of NERLYNX in international territories, primarily in China.

The decrease was due to decreased product sales by our sub-licensees in international territories, primarily in China.

Cost of sales

Cost of sales was approximately $58.2 million for the year ended December 31, 2025 , compared to $64.4 million for the year ended December 31, 2024 .

The $1.7 million increase was primarily due to the increase of product unit sales to our sub-licensees and the related cost of sales (primarily sales in China), partially offset by lower domestic sales.

The $6.2 million decrease was primarily due to the decrease of product unit sales to our sub-licensees and the related cost of sales (primarily sales in China), partially offset by higher domestic sales.

Selling, general and administrative expenses:

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Stock-based compensation

Loss on impairment of asset

Total SG&A expenses were approximately $70.8 million and $80.2 million for the years ended December 31, 2025 and December 31, 2024.

The decrease is primarily attributable to the following:

a decrease in payroll and related costs of approximately $1.9 million , primarily due to lower headcount, partially offset by annual salary increases;

a decrease in provision for credit loss (recovery) of approximately $1.4 million , due to an overdue receivable as of December 31, 2023 that was collected in 2024;

a decrease in professional fees and expenses of approximately $4.1 million, primarily due to a decrease in consultant and contractor expenses (primarily marketing related) of approximately $2.7 million, a decrease in legal fees of approximately $1.0 million and a decrease in insurance and other expense of approximately $0.4 million;

a decrease in stock-based compensation expense of approximately $1.3 million , primarily due to lower fair value on equity grants as a result of a lower market price for our common stock;

a decrease in

loss on impairment of asset

expense of $0.6 million in connection with our decision to sublease a portion of our leased office space in 2023, which was recorded as an operating asset in accordance with ASC 842.

an increase in payroll and related costs of approximately $3.1 million , due t o severance costs related to the departure of our Chief Commercial Officer, an increase in our commercial team compensation, merit increases and increases in our healthcare insurance premiums;

a decrease in provision for credit loss recovery of approximately $0.2 million , primarily related to the payment history of a customer receivable;

a decrease in professional fees and expenses of approximately $10.8 million, primarily related to legal fees associated with the AstraZeneca litigation in the prior year;

a decrease in stock-based compensation expense of approximately $1.3 million due to the departure of an executive in 2025 and lower fair value on equity grants due to lower market price for our common stock.

Research and development expenses:

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Stock-based compensation

Total R&D expenses increased approximately 9.0% to $54.9 million for the year ended December 31, 2024 from approximately $50.4 million for the year ended December 31, 2023.

Total R&D expenses were approximately $62.1 million and $54.9 million for the years ended December 31, 2025 and December 31, 2024.

The increase is primarily attributable to the following:

an increase in clinical trial expense of approximately $3.5 million, primarily due to the procurement of alisertib drug product as well as increased alisertib study activity, partially offset by fewer clinical milestones being achieved;

an increase in internal R&D of approximately $1.5 million, primar ily due to higher compensation related to achieving company goals and one-time payroll and severance related expenses.

The increases above were partially offset by:

a decrease in stock-based compensation of approximately $0.7 million , primarily due to lower fair value on equity grants as a result of a lower market price for our common stock .

an increase in clinical trial expense of approximately $3.4 million, primarily due to expanded alisertib development;

an increase in consultants and contractors of approxim ately $1.5 million, pri marily due to expanded alisertib development.

Other income and expenses:

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For the year ended December 31, 2025, we recognized approximately $4.1 million in interest income compared to approximately $4.7 million of interest income for the year ended December 31, 2024.

The $2.1 million increase in interest income was primarily the result of increased balances in cash equivalents and marketable securities.

The $0.6 million decrease in interest income was primarily the result of lower interest rates and timing of investments.

Interest expense

For the year ended December 31, 2025 , we recognized approximately $6.6 million in interest expense compared to approximately $12.5 million of interest expense for the year ended December 31, 2024 .

The approximately $0.9 million decrease in interest expense was due to the pay down of debt in 2024 as well as ending imputed interest on $8.0 million related to the final installment payment on the Eshelman litigation settlement paid in October 2024.

For the year ended December 31, 2024, we recognized approximately $0.9 million in other income, primarily due to increased income related to the termination of our sublease and resulting settlement payment of $0.5 million, partially offset by unfavorable exchange rates in Euro-denominated transactions.

Deferred income tax benefit

The approximately $5.8 million decrease in interest expense was primarily related to a lower debt balance related to the pay down our debt principal during the year ended December 31, 2025.

For the year ended December 31, 2025, we recognized approximately $1.0 million in other income, compared to $0.9 million in other income for the year ended December 31, 2024.

The increase was primarily due to increased sublease income.

Current tax expense

The $0.5 million increase in current tax expense is materially consistent with the increase in net income before taxes.

Deferred income tax expense (benefit)

In the fourth quarter of 2025, Puma recorded a $7.1 million income tax expense, offset by a $3.8 million partial release of a valuation allowance resulting in a non-cash, deferred tax expense of approximately $3.2 million.

In 2024, we released a portion of our valuation allowance related to our deferred tax assets in the amount of $7.1 million, which significantly increased our net income for the year.

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Financing activities

Net (decrease) increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Operating Activities

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We recorded cash flows from operating activities of approximately $41.8 million for the year ended December 31, 2025 and recorded cash flows from operating activities of approximately $38.9 million for the year ended December 31, 2024 .

Net cash provided by operating activities for the year ended December 31, 2024 was $38.9 million which consisted of net income of $30.3 million, adjusted for non-cash items of approximately $19.3 million, including stock-based compensation of $8.2 million, and depreciation and amortization of $11.5 million and recovery of credit loss of $0.5 million.

Total changes in cash flows from operations were due to a change in working capital related primarily to a decrease in accrued expenses of approximately $15.8 million, an increase in inventory of approximately $1.6 million (increase in inventory purchases), offset by a decrease in accounts receivable related to collection of royalties receivable.

Net cash provided by operating activities for the year ended December 31, 2023 was $27.0 million which consisted of net income of $21.6 million, adjusted for non-cash items of approximately $23.3 million, including stock-based compensation of $10.2 million, and depreciation and amortization of $11.5 million, provision of credit loss of $0.9 million and loss on impairment of a right-of-use ( “ROU” ) asset of $0.6 million.

Total changes in cash flows from operations were due to changes in working capital and primarily related to an increase in inventory of approximately $2.6 million (increase in inventory purchases) and an increase in accounts receivable, net of approximately $8.4 million (increase and timing of fourth quarter total revenues) and a decrease in accrued expenses of approximately $7.6 million.

Net cash provided by operating activities for the year ended December 31, 2025 was $41.8 million which consisted of net income of $31.1 million, adjusted for non-cash items of approximately $20.6 million, including stock-based compensation of $6.9 million, depreciation and amortization of $10.9 million, deferred income taxes of $3.2 million and recovery of credit loss of $0.4 million.

Total changes in cash flows from operations were due to a change in working capital related primarily to an increase in accrued expenses of approximately $13.2 million, a decrease in inventory of approximately $3.2 million, offset by an increase in accounts receivable of $21.3 million, a decrease in post-marketing commitment liability of $2.4 million and a decrease in operating lease assets and liabilities, net of $1.8 million.

Net cash provided by operating activities for the year ended December 31, 2024 was $38.9 million which consisted of net income of $30.3 million, adjusted for non-cash items of approximately $12.1 million, including stock-based compensation of $8.2 million, depreciation and amortization of $11.5 million and recovery of credit loss of $0.5 million.

Investing Activities

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During the year ended December 31, 2024, cash used in investing activities was approximately $20.4 million.

Cash used in investing activities was primarily due to the purchase of the intangible asset of $12.5 million we paid to Pfizer for meeting a commercial sales milestone and the purchase of available-for-sale securities of approximately $23.8 million, partially offset by the maturities of available-for-sale securities of approximately $17.3 million.

Cash used in investing activities was primarily due to the purchase of available-for-sale securities of approximately $76.2 million, partially offset by the maturities of available-for-sale securities of approximately $55.8 million.

Financing Activities

Cash used in financing activities for the year ended December 31, 2025 was approximately $45.2 million.

Of this amount, $44.4 million related to the payment of principal, as well as exit fees of approximately $0.9 million, on our debt with Athyrium, partially offset by approximately $0.1 million of proceeds from employee stock options exercised.

Cash used in financing activities for the year ended December 31, 2024 was approximately $33.8 million.

Of this amount, $34.0 million related to the payment of principal, as well as exit fees, on our debt with Athyrium, partially offset by approximately $0.2 million of proceeds from employee stock options exercised.

There were no financing activities recorded for the year ended December 31, 2023.

Athyrium Note Purchase Agreement

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Contractual Obligations

Less than 1 year

Operating Lease Obligations

Long Term Debt Obligations (principal and interest)

We also engage with CROs and contract manufacturing organizations (“CMOs”) in addition to eng aging in contracts for the management of its ongoing clinical trials and pre-commercialization efforts.

We also engage with CROs and contract manufacturing organizations (“CMOs”) in addition to eng aging in contracts for the management of our ongoing clinical trials and pre-commercialization efforts.

We may cancel these agreements with a 30 to 45 day written notice to the outside vendor.

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The remaining milestone amounts were not included in the table above as the timing of when or if these payments will be made is uncertain.

As of December 31, 2024, our obligations for potential milestone payments totaled app roximately $16.3 million .This amount will be paid by us if all milestones are reached and would reduce the overall contractual obligation if one or more milestone is never reached.

As of December 31, 2025, our obligations for potential milestone payments totaled app roximately $15.7 million.

This amount will be paid by us if all milestones are reached and would reduce the overall contractual obligation if one or more milestone is never reached.

In regard to our contractual obligations in relation to the Pfizer in-license a greement, as consideration for the license, we are required to make substantial payments upon the achievement of certain milestones totaling approxim ately $187.5 million if all such milestones are achieved, of whi ch $102.5 million h ave been achieved as of December 31, 2025 .

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The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period.

Our analyses also contemplated application of the constraint in accordance with the guidance, under which it determined a significant reversal of revenue would not occur in a future period for the estimates detailed below as of December 31, 2024 and, therefore, the transaction price was not reduced further during the year ended December 31, 2024.

Our analyses also contemplated application of the constraint in accordance with the guidance, under which we determined a significant reversal of revenue would not occur in a future period for the estimates detailed below as of December 31, 2025 and, therefore, the transaction price was not reduced further during the year ended December 31, 2025.

Actual amounts of consideration ultimately received may differ from our estimates.

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Payor Rebates:

We contract with certain private payor organizations, primarily insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products.

We contract with certain private payor organizations, primarily insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of our products.

We estimate these rebates and record such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability.

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We evaluate these agreements under ASC 606 to determine the distinct performance obligations.

Non-refundable, up-front fees that are not contingent on any future performance and require no consequential continuing involvement by us, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered.

Non-refundable, upfront fees that are not contingent on any future performance and require no consequential continuing involvement by us, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered.

We defer recognition of non-refundable upfront license fees if the performance obligations are not satisfied.

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Revenue is recognized by measuring the progress toward complete satisfaction of the performance obligations using an input measure.

In September 2024, the Pharmacovigilance Risk Assessment Committee approved a change in existing post approval requirements for overall results and a reduction in sample size for the Pierre Fabre NERLYFE post-marketing study in Europe.

As of December 31, 2024, there is a post-marketing liability of $4.6 million, and the final costs of the study are being assessed.

Any adjustment to the liability will be recorded as license revenue as the original $9.0 million estimate in study costs were recorded as a reduction to license revenue.

Royalty Revenue:

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In determining whether a loss should be accrued, we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the lo ss (see Note 13 – Commitments and Contingencies in the accompanying notes to the financial statements).

Acquired In-Process Research and Development Expense

We have acquired, and may continue to acquire, the rights to develop new drug candidates.

Accounting Pronouncements Adopted During the Current Year

Segment Reporting Disclosures

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The standard expands reportable segment disclosure requirements for public business entities primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit (referred to as the “significant expense principle”).

We have adopted this standard for our fiscal year 2024 annual financial statements and interim financial statements thereafter and have applied this standard retrospectively for all prior periods presented in the financial statements.

See Note 2–Significant Accounting Policies for further information.

ASU 2023-09, Improvements to Income Tax Disclosures

On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures ( “ ASU 2023-09 ” ).

ASU 2023-09 amends ASC 740, Income Taxes to expand income tax disclosures and requires that the Company disclose (i) the income tax rate reconciliation using both percentages and reporting currency amounts; (ii) specific categories within the income tax rate reconciliation; (iii) additional information for reconciling items that meet a quantitative threshold; (iv) the composition of state and local income taxes by jurisdiction; and (v) the amount of income taxes paid disaggregated by jurisdiction.

The Company adopted ASU 2023-09 for the year ended December 31, 2025 on a prospective basis.

Accordingly, the expanded disclosures are provided for the year ended December 31, 2025, while prior period disclosures have not been retroactively adjusted and continue to be presented under the previous disclosure requirements.

As this update only impacts disclosures, its adoption did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

See Note 12 Income Taxes for additional information.

Recently Issued Accounting Standards

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements – Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

The ASU modifies the disclosure or presentation requirements of a variety of Topics in the Codification to align with the SEC’s regulations.

The ASU also makes those requirements applicable to entities that were not previously subject to the SEC’s requirements.

The ASU is effective for us two years after the effective date to remove the related disclosure from Regulation S-X or S-K.

As of the date these financial statements have been made available for issuance, the SEC has not yet removed any related disclosure.

We do not expect the adoption of ASU 2023-06 to have a material effect on our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for our annual reporting periods beginning after December 15, 2025.

Adoption is either with a prospective method or a fully retrospective method of transition.

Early adoption is permitted.

We are currently evaluating the effect that adoption of ASU 2023-09 will have on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures :

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Early adoption is permitted.

The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures.

The amendments may be applied either (i) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (ii) retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis